China to roll out broad stimulus to offset impact of US tariffs, says Goldman
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US President-elect Donald Trump has threatened to impose tariffs on Chinese imports at rates as high as 60 per cent.
PHOTO: AFP
Hong Kong – China will use a broad range of stimulus measures to offset the effects of expected US tariffs and a persisting housing downturn, according to Goldman Sachs Group.
The investment bank expects the Chinese government to deploy extra monetary and fiscal easing and support for the home market, chief economist Jan Hatzius told Bloomberg Television on Jan 14.
He forecasts growth in the world’s second-largest economy to slow to 4.5 per cent in 2025 from what was likely to be around 5 per cent in 2024, in line with consensus. “We do think there’s going to be an impact from the tariffs,” he said on the sidelines of the bank’s Global Macro Conference in Hong Kong, “although I think a significant part of that is going to be undone or cushioned by policy stimulus”.
Mr Hatzius added that tariffs on Chinese shipments and auto imports from Europe are “going to have an impact” on US inflation and growth, though “not a huge impact”.
US President-elect Donald Trump has threatened to impose tariffs on Chinese imports at rates as high as 60 per cent, levies that would decimate trade between the two countries. Any steep levies may also hurt exports as a growth driver responsible for almost a quarter of China’s economic expansion in 2024.
Goldman earlier predicted a 20 per cent tariff on Chinese goods as its base case, although how Trump may roll out the levies remains uncertain.
Members of his incoming economic team are discussing slowly ramping up tariffs month by month
China’s trade surplus jumped to a record in 2024, in part by businesses front-loading shipments to avoid potential US tariff hikes. Efforts to dodge levies have also boosted exports to South-east Asia, where devices are assembled using Chinese parts and exported to the US as global supply chains respond to geopolitical risks. BLOOMBERG
